DOLLARS ON SALE, 30 PERCENT OFF ( The 'Booming" Bush Economy news)
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Currencies in every country need to adjust from time to time to close trade deficits. Trade deficits reflect more purchases (than sales) of goods and services abroad, and are financed by the flow of financial capital. Since Americans don’t save, capital, as well as goods, must flow into our country to pay for the trade deficit. (Indeed, the trade deficit creates a financial deficit.)
The fact that our federal government spends more than it taxes, adds to the problem. This basically means that our government is borrowing $400 billion at the same time it needs to find lenders willing to cover the $800 billion needed to finance the trade deficit. Congress has let spending run out of control, pushing up the Treasury’s need to borrow.
[...]
Currencies in every country need to adjust from time to time to close trade deficits. Trade deficits reflect more purchases (than sales) of goods and services abroad, and are financed by the flow of financial capital. Since Americans don’t save, capital, as well as goods, must flow into our country to pay for the trade deficit. (Indeed, the trade deficit creates a financial deficit.)
The fact that our federal government spends more than it taxes, adds to the problem. This basically means that our government is borrowing $400 billion at the same time it needs to find lenders willing to cover the $800 billion needed to finance the trade deficit. Congress has let spending run out of control, pushing up the Treasury’s need to borrow.
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posted by TheFuriousGourmet | 11:57 AM
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